Creating An Ecological, Worker Run Co-operative

A personal history of Reverse Garbage in Brisbane

by John Hepburn

February 16, 2006

Since 1998, Reverse Garbage Co-op has been diverting re-useable materials
away from landfills and making them available at low cost to the local
community. It has an annual turnover of around $300,000 per annum, employs 5-6
people, and is financially self- sustaining. It operates as a not-for-profit
worker managed co-operative with a flat organisational structure. It was started
with total capital input of just $33,000.

Introduction

In case anyone hadn’t noticed, our economy is killing the planet. It also
commits millions of people to live in poverty and is creating an ever-widening
gap between rich and poor. Some of us think that we should do something about
it.

The failures are systemic and the solutions also need to be systemic. We need
fundamental changes in the way that we think about our relationship with each
other and with the earth, and changes in the fundamental power relations in
society. Not only do we need to challenge the existing power structures (stop
inappropriate development, pollution etc), but we also need to build
alternatives – alternative economic systems, alternative political systems, and
alternative cultural and social norms.

We already have plenty of technological fixes. The thing that we need to get
a whole lot better at is the political and economic fixes. We need to learn how
to work co-operatively, we need to learn how to do real democracy at a local
community level, we need to learn how to create an ecological economy – now! We
can’t wait for experts to teach us what to do. We need to learn by doing. The
change that is required for sustainability is going to be led by local
communities. It is going to be messy, we’re going to experiment, get things
wrong, get things right and move on.

This essay is a history of one attempt at starting an ecologically based,
worker managed co-operative in Brisbane, Australia. It is one of many
experiments happening all over the world aimed at creating viable models for
ecologically sustainable economic and community development. This is
written 6 years after we started Reverse Garbage so we have the benefit of at
least a little hindsight – to learn what worked and what didn’t – what to
replicate and what to avoid.

There tends to be a lot of woolly thinking about ‘alternative models’ – which
are often promoted well beyond their capacity to deliver worthwhile results.
Part of this problem is excessive self promotion driven by the need to obtain
funding. However, another part is the pervasive sense of hopefulness whereby
people switch off their critical faculties when they encounter nice people
trying to do good things. It is useful to remember that Nice is most usefully
thought of as an acronym for “Not Insightful or Critical Enough” and, if we are
going to succeed in replacing the current model of doomsday economics with
something more life affirming and sustainable, we are going to have to subject
alternatives to critical scrutiny.

In that vein, this essay provides a brief (and personal) history of the
creation of Reverse Garbage Co-op in Brisbane. It is partly a history of people,
places and goings on, and partly an analysis of ideas and their practical
application.

If Reverse Garbage is the answer, what was the question?

Working with Friends of the Earth Brisbane at the end of 1997, a few of us
were asking the following questions:

q How can we earn a living doing something that makes a
positive contribution to the environment and to our
community?q How can Friends of the Earth develop a secure
source of ongoing funding that fits with their vision and the values and that
doesn’t compromise the integrity of the organisation?q How
can we start creating an alternative, sustainable and equitable local economy as
a way to help encourage and inspire broader change?The idea

We were inspired by the Wombles. It seemed that there had to be opportunities
to live off the discards of our wasteful, industrial society. Whenever you walk
past an industrial skip you see valuable materials destined to be buried in the
ground. Our economy systematically destroys ecosystems in order to create
‘products’, which we then fail to use efficiently and turn into another
environmental problem through landfill. Because this is common practice, it is
easy to think of it as normal – which it isn’t. It is actually insane and
grossly inefficient, not to mention morally reprehensible in light of the
flow-on ecological and social consequences.

After travelling around the east coast of Australia looking for interesting
models of recycling businesses that work, there were two obvious options:

It became evident that a tip shop, while possible, was going to take quite a
long time to establish in Brisbane due to the constraints of the waste
management infrastructure that was in place. Brisbane has a system of ‘transfer
stations’ where ‘wasted resources’ are delivered and dropped into a pit, crushed
by a bulldozer and loaded into trucks to be transferred to landfill sites
outside of town. This is far from ideal in terms of salvaging useful items for
re-use or recycling.

After visiting the Reverse Garbage operations in Sydney and Melbourne, it
seemed that there was a similar opportunity for creative re-use of industrial
discards in Brisbane.

Reverse Garbage in Sydney had been started by teachers as a way of providing
low cost art materials to schools. While it had developed a strong environmental
ethic, the initial impetus for the organisation seemed to be more
artistic/educational than directly environmental. The business had been running
for over 20 years and had managed to achieve a reasonable level of financial
viability despite being subsidized by local government through the provision of
low cost rent for their warehouse and grounds.

A quick analysis of the industrial base of Brisbane compared to Sydney and
Melbourne revealed that Brisbane had a smaller number of large manufacturing
organisations but that there was still a sufficiently large waste stream for us
to proceed with some basic market research.

Creating an initial project team

I spoke with a number of other people who I thought may be interested in
being part of setting up a Reverse Garbage operation in Brisbane. Lots of people
liked the idea but none who seemed serious about committing to the project. I
asked an old friend from University who had recently quit working as an engineer
and was looking at ways of earning a living in an ethical way. Mitch Semple and
I agreed to start working together on the project.

Shortly after that, and only a few weeks after visiting Reverse Garbage in
Sydney, I was contacted by Lena Tisdall, a Brisbane artist who was keen to start
some kind of Reverse Garbage creative re-use center after being inspired by RG
Sydney.

I had an initial meeting with Lena and outlined the plans to date. She had
lots of great ideas, a useful range of skills and networks and was super keen.
Lena, Mitch and I started to build a 3 way working relationship – to clearly
articulate our vision and to agree on some principles and processes by which to
work together.

We agreed to conduct some basic market research and then evaluate the
viability of the project based on the results of the research.Initial
funding sources

We opened a bank account and Mitch, Lena and I each put in $50 to cover the
initial cost of postage and phone calls. Mitch and I started investigating the
“New Enterprise Incentive Scheme’ (NEIS) which was designed to provide 12 months
income support for unemployed people starting their own business. We both
managed to enroll in some kind of vague pre-NEIS scheme which at least meant
that we could stay on the dole without having to look for work.Market
Research

The viability of Reverse Garbage was going to depend on two factors:

1. a consistent and accessible supply of a wide variety of
high quality (valuable) discards;2. customers who would be
willing to buy the materials.

From the visits to Reverse Garbage in Sydney and Melbourne, we had a basic
list of the industries from which they sourced their materials. This coupled
with Mitch’s and my background as manufacturing engineers and our knowledge of
the local manufacturing sector gave us a long list of potential ‘suppliers’.

Lena had worked in schools as an artist and provided the outline of a
potential customer base - including schools, kindergartens, the Rock Eistedford,
artists and a number of other potential customer groups.

We designed a survey to collect key information from potential customers
about their interest in a Reverse Garbage resource center and potential
spending. We mailed these surveys to several hundred schools and managed to get
a sufficient number of surveys back to see that there was some real interest. We
did some basic figures on the size of the market (number of schools multiplied
by their average art materials budget multiplied by an estimated % market share)
and figured out that it looked reasonably viable.

On the supply side, we phoned over a hundred companies and asked them if they
had anything potentially useful that they throw out as part of their usual
operations. From this we built a list of potential products and potential
suppliers.

Growing the team – stage 1

We reaslised that, due to the relatively low value of the products we were
going to be selling, if Reverse Garbage was going to be financially viable, it
was going to have to be a high turnover business. This meant that it was going
to have to be a reasonably large operation – certainly employing more than 3
people. So we started to think about growing the team.

Peter Maclean (who I had been working with on various different green
business proposals) started to become more involved with Reverse Garbage as
Mitch and I began writing the business plan.

Around this time I met John Gower, a professional fundraiser with a long
history in retail. I spoke with him about fundraising for FoE Brisbane and the
vision of Reverse Garbage - and to ask for advice. He somehow became inspired by
the RG vision and offered to help with the development of the
project.Dealing with the NEIS scheme

Under normal circumstances, the NEIS scheme involves full time business
training for several months, followed by 12 months of ‘hassle free’ dole money,
as well as some mentoring from a business advisor. From the outset, our attitude
towards NEIS was that we didn’t want training but just wanted access to a hassle
free living wage for 12 months so we could get on with setting up the
business.

Our initial operations plan told us that we were going to need a total of 8
people to run the organisation on the scale that we thought was required to be
profitable. NEIS had only ever dealt with small business start ups with a
maximum of 3 people – so 8 was just plain weird. They had also never dealt with
a non-profit business before – this was weirder still. And they were insisting
that we had to do 3 months business training.

We eventually wore them down. Mitch and I both had business degrees, and John
Gower had run multi million dollar businesses for years – so we convinced them
that we knew what we were doing. NEIS agreed that for every person who had
business experience, we could have one other person on the NEIS programme who
didn’t need to do the training. So we managed to get spaces for 6 people on NEIS
and managed to avoid having to sit through months of training.

Growing the team – stage 2

We were meeting weekly in the room above the West End library on Boundary
Street. Our office consisted of a couple of cramped desks with phones in the FoE
office out the back of Justice Products, also on Boundary Street.

We placed a two line ad in the Courier Mail for 3 people to work in a
non-profit recycling co-op and we also put up ads in some of the local greenie
hang outs. An initial phone call screened out most people when they realized
that they would have to work full time and only get paid the equivalent of the
dole – and they would have to become a director of a co-operative. We
interviewed 5 or 6 people and ended up inviting three women to become part of
the project, including Lisa Owen who at the time of writing is the longest
standing member of Reverse Garbage (6 years and still going strong).

After a few weeks, one of the new recruits was coming to meetings late and it
became obvious that some of the tasks weren’t being done. We didn’t have the
time or energy to carry any unproductive members of the team and she was asked
to leave only a month after joining.

Developing the organisational model

By this time, we had a basic business plan down on paper and had written a
draft constitution for a co-operative. In developing a structure for the
organisation we wanted to achieve a number of things:1. An
organizational model that would reflect our vision for a socially just and
environmentally sustainable world – so that we would practice what we
preach.2. Non-profit status to gain good will with
industry to enable us to collect discard materials
easily;3. Constitutional requirement that any surplus
(profits) be used to support Friends of the Earth;4. A
legal model that would enable us to enter into the kind of contracts that we
would need to enter (ie long term lease on property);5. A
model whereby decision making rights and responsibilities are balanced (where
the people who are doing the work are the ones that make the decisions about the
work);6. A flat structure where everyone would be paid the
same and where there would be a sharing of conceptual and rote
work;7. A non-hierarchical decision making model that
would both require and lead to full creative participation of everyone
involved;

After also looking at the legal frameworks allowed under the Corporations Act
and the Incorporated Associations Act, we decided to register as a Co-operative
under the recently revised QLD Co-operatives Act.

The organizational decision making model was roughly based on the consensus
model used by Friends of Earth – although the details of this model were cause
for some considerable conflict.

I was proposing a consensus model whereby if consensus is not reached, a
majority of 75% could approve the decision at a subsequent meeting. However,
Peter was insisting that we should have a consensus decision making model
without any democratic fallback. I argued that this would allow a minority (in
fact a single individual) to effectively veto any decision and to bring the
organisation to a standstill.

After several weeks of arguing, neither of us was budging an inch. It ended
with Peter deciding that he could no longer be part of the project. Sarah, one
of the other new recruits from the Courier Mail ad left with him. Mitch also
left around this point – for personal health reasons.

We finalized the constitution and submitted a draft to the Co-operatives unit
at the Office of Fair Trading. They hated it. We went backwards and forwards
arguing over interpretations of the Co-ops Act. The main difficulties were our
lack of Managing Director, and the consensus model. The final differences were
negotiated (with quite a few compromises on our side – which turned out to be
inconsequential) with the help of Anthony Esposito (long term co-op
advocate) who effectively mediated between myself and the co-op unit.

Reverse Garbage Co-op Ltd. was officially registered in November 1998, almost
a year after the idea was first developed.

Growing the team – stage 3

After Peter and Sarah left, we started to look for a couple of replacements.
Lisa had met a local artist who worked with recycled materials and who was
interested in getting involved with Reverse Garbage. Her and Lena had a meeting
with him to check out his work and to talk to him about his ideas. Timo Mehlem
was invited to meet the rest of the team and shortly afterwards was asked if he
wanted to be part of the soon to be formed Reverse Garbage Co-operative.

Around this time, I had been starting to do some theoretical work on
sustainability and resource efficiency and through this had begun working with
Brenton Fletcher who was soon to finish his PHD in Chemical Engineering,
researching conceptual models of sustainability in plastics recycling. Brenton
was keen to get involved in something practical and we still needed one more
person. After another informal interview in our meeting room above the West End
library, Brenton was invited to join the team.

We still needed one more person – preferably someone very practical to help
with maintenance and building projects, and running the truck. Robbie Lea, a
friend who I had known from forest blockades, was in town and at a loose end.
After coming along to an informal interview at one of our weekly meetings we
invited him to be part of the team.

Fundraising

From the outset we took a very broad view of fundraising. We were very clear
about defining our requirements. Do we need money or do we need a particular
thing? In some cases (insurance, licences, fees) we were very clearly going to
need money. In other cases we reaslised that it would probably be easier to find
somebody to donate the particular thing that we needed than to raise the
money.

The budget in the business plan made the assumption that no wages would be
paid for the first 12 months of operation. The only wages would be from the NEIS
payments – a living wage.

The other start up costs were estimated at around $33,000. This was a very
very tight budget that assumed that many of our core operational tools would be
donated (desks, computers etc.). We started looking for our core infrastructure
and for sources of funds.

The infrastructure side was relatively easy. We soon had a phone system,
computers, all the office furniture we could dream of, a pallet jack (freshly
refurbished by the firm that donated it) and a donation of 150 wheelie bins from
the plastics company that made them. We worked all of our personal networks very
hard – and we made brilliant and inspired sales pitches.

The money side was more difficult. We approached ethical investment
organisations for grants or no-interest loans. We approached the Brisbane City
Council and the State Government. We spoke with private philanthropists. We got
nothing. Without a track record, nobody was willing to invest.

After lengthy deliberation we applied for a $15,000 grant from the Gaming
Machine Community Benefit Fund with which to purchase a truck and lifting
equipment. The Grant came through and we were able to purchase our core
operating asset. (Note: We refused to apply to the Jupiters Casino Fund as this
was seen as a PR fund for the gambling industry. The prevailing argument about
the The Gaming Machine Community Benefit Fund was that it is really a form of
tax on gambling that effectively goes into consolidated revenue of the State
Government.)

So we had $15,000 but still needed another $18,000. The remaining funds were
cobbled together with loans from the members of the co-op. We had no other
option and decided that a personal commitment of $2000 each would help us to
sharpen our focus and our commitment. Some of us had to borrow money from
friends or relatives, but in the end we had loans from six of the members, plus
an extra loan of $6000 from me. We had a total of $33,000 in the
bank.Finding a property

Finding a property proved to be a much more difficult task. John Gower and I
spent countless hours driving around the suburbs of Brisbane. In many ways this
is where a lot of the real planning for the business took place – arguing and
debating different ideas, solving problems and brainstorming while we drove
around looking at properties. We decided to aim high and asked the local council
to give us a large inner city property for a peppercorn rent. They refused. We
kept looking for months all over Brisbane – from the inner city to the outer
lying industrial areas.

One day Timo called and said he had been to a clearance sale at a local West
End commercial property that he thought would be ideal. We went and checked it
out – it was perfect. We contacted the owners and John Gower started the
negotiations. We wanted a 3+3+3 lease to give us the security we needed. They
were insisting on directors guarantees for the loan. Only Lena and John owned
their houses – the combined assets of the rest of us amounted to a few bicycles,
musical instruments and a few tools – so directors guarantees were not going to
work because it would mean some directors would bear far more responsibility
(and risk) than others. John did a brilliant job. If it wasn’t for his steadfast
confidence and brilliant negotiation skills we probably would never have got the
lease. We ended up with a 3+3+3 lease, with no directors guarantees, and three
months rent free from the date we opened the doors.

Meanwhile I started talking to some local town planners to make sure that we
could get the necessary council approval for the project. John Panaretos from
Urban Strategies donated considerable time to help us negotiate the maze of
council regulations. To be prudent we decided that it would be best to invite
Tim Quinn (who was then a local Councilor and head of the Council Planning
Committee) down to the warehouse to explain the project.An operational
plan

So we had the concept, the legal structure, the money and the property. The
next thing we needed was an operational plan and an organisational process to
make it all happen.

We adoped an organisation model developed by Stafford Beer – a British
management theorist and systems thinker. He had developed the ‘Viable Systems
Model’ (VSM) based on observations about how the human body (and in fact any
living system) functions. He identified the key requirements of viability in any
system and had put this into concepts for organisations.

The organizational functioning of Reverse Garbage was developed to reflect
this model. We had board meetings and we had operational meetings. We identified
the key operational areas (resource acquisition, warehouse operations, sales,
PR, admin and finance, legal) and allocated responsibility for each area to
different people. We each wrote our own job descriptions (both for the start up
phase and then ongoing) as well as individual work plans which were then agreed
by the group.

We made sure that there was a reasonably sharing of jobs. Everyone was on the
roster to clean the toilet at least once each week, and everyone had to do some
stints in sales and sorting. By the same token, everyone had some sort of
conceptual work as part of their job description. (Michael Albert in his work on
Participatory Economics calls this concept “balanced job complexes”).

We moved into the property in mid January and we set a launch date for the
end of March. We had two and half months to deck out the warehouse and collect
enough stock for it to be worthwhile opening. The work plan was written into a
gannt chart that was kept on the wall in the office so that we could all track
our progress in the lead up to the opening.

We bought the truck the same week that we moved into the warehouse. The first
thing we had to do was clean the warehouse out. There were piles of junk from
the previous occupants – some of which was useful to us as future products, some
of which was sent to landfill. We had to remove dust extraction equipment, scrub
floors, design and build a material handling system, move walls, build shop
counters…

I was living in a share house at the time. Every day I would leave for work
before anyone else had woken up, and I would get home after they were all in
bed. I think I must have worked about 16 hours a day every day for six months.
So did everybody else.

Friends of the Earth decided to move into the house next door. We negotiated
a deal with the owners whereby we would have 18 months rent free in return for
refurbishing the inside of the building. So while Reverse Garbage was getting
ready to start business, a wonderful team of activists were turning their hand
to renovating what was soon to become the new FoE Brisbane office. The birth
of a new economy – our first income

The previous occupant of 296 Montague Road was an electric lighting company.
They had left behind mountains of partially cut and folded sheet metal. Some of
this was useful to us, but most of it was destined for recycling. Timo, Robbie,
Brenton and I spent two days sorting through the piles and loading the truck
with scrap steel in preparation for what was going to be our first trip to the
recycling depot - and our first ever income.

Brenton and I tied down the load and headed off to the SimsMetal yard in
Rocklea. We drove through the weighbridge and out into the scrap yard. It took
about half an hour to throw the steel off the truck. It was a stinking hot
January day – we were dripping sweat, filthy and feeling proud. We had all been
working our arses off and today would be the start of a new economy – redefining
waste as a valuable resource! We drove through the weighbridge on the way out
and Brenton went in to collect our fee. We’d been guessing how much it might be
- $50? $200?

Brenton came back looking puzzled. “How much did we get?” I asked. “Three
forty” he said. “Three hundred and forty bucks!” I thought to myself,
“Whoopiee!”

Brenton clarified, “Ummmm…well actually it was three dollars and forty
cents.” I couldn’t belive it. “No way – you’ve got to be kidding – they must
have got it wrong. Go back and check.” So Brenton went back in – only to
confirm that our two days work had earned us a massive $3.40. It is hard to
convey the sense of outrage that we felt. It was starting to dawn on us why
there were so few recycling businesses.

We stopped at the drive through bottleshop on the way back to the warehouse
and asked for two light beers. “That’ll be $3.40” said the attendant. “Of
course,” I said, somehow managing to enjoy the irony. When we got back to
the warehouse we had to tell the others. “Sorry guys but we pissed our first
income up against the wall”.

Opening the doors and winning awards

After three months of work we opened our doors with a singing, dancing
performance that managed to get state wide TV coverage and launched Reverse
Garbage successfully into the world. It was incredible to see the amount of
support that we received from the local community. Materials poured in, artists
offered their services, volunteers were knocking at our door, newspapers and
radio stations agreed to cover our story.

During the opening months, Judy Gower joined the Reverse Garbage team, as did
Sandy McBride who started to develop our environmental education
programmes. Before our first year was out, we were awarded the “New Small
Business of the Year” award by Quest Newspapers. It was a wonderful validation
from the ‘mainstream’ after months of tireless work. John Gower summed it up
well when he said, “We didn’t know that it would be impossible, so we just got
on and did it.”

After 12 months the NEIS programme ended and the business was earning enough
to replace this living wage – and actually increase it slightly. We developed a
budgeting model whereby our annual budget was divided by 52 to give a weekly
budget. Any weekly income that was over this budget level was divided up and
paid out as wages. This meant that our wages fluctuated anywhere from $6
per hour up to $15 per hour. It was direct and immediate feedback on our
performance and ensured that we were all focused on the business of becoming
financially viable. Other cash flow fluctuations were managed with a
buffer of about $5,000 left over from the start up. Gradually our wages
increased over time – edging ever closer to the holy grail of a consistent $15
per hour wage.A lingering question of equity

When planning the business we realized that, during the start up phase we
would not be able to afford to pay people a wage that reflected either the value
of their work or the sacrifice they would make. However, we believed that the
business would be successful and that, after several years, employees/members of
Reverse Garbage would be earning a reasonable living. This created an obvious
disequity. The people who had the initiative and drive to start the business
would not be financially compensated/rewarded, while people who walked into the
business after several years would be paid well from day one.

In order to solve this problem, we devised a model of deferred payment,
whereby a portion of unpaid wages were accrued as a debt that could be claimed
against Reverse Garbage at some future date. We realised that this debt could
not be instantly recallable, otherwise Reverse Garbage would technically be
insolvent and the directors would have a fiduciary duty to close the business.
The deferred wages system that we arrived at basically involves the formal
acknowledgement of the unpaid wages, along with contracts with each of the
involved people that outline the terms of repayment. Put simply, if Reverse
Garbage does not have the money to repay these wages then it will not be forced
to jeopardise it’s ongoing viability to do so. However, if the surplus is there,
the back wages debts must be repaid. Alternatively, the back-wages may be able
to be claimed in materials instead of cash although this raises practical
difficulties in relation to income tax.

This system created an enormous headache with our auditors – and was at least
in part responsible for a less than amicable end to our relationship with them.
On the otherhand, putting these debts on the public record means that Reverse
Garbage is publicly and legally committed to honoring them and ensuring that the
principles of equity, which are so clearly written in it’s constitution, are
upheld.

In order for equity to prevail, the sacrifice and benefits accrued by the
founding members need to be placed in the context of the sacrifice and benefits
being accrued by the current generation of co-op members – according to the
general guide of ensuring no undue privilege and no undue penalty.Key
lessons learnt

Don’t undercapitalise

The real cost of starting up Reverse Garbage wasn’t $33,000. It was $33,000
plus $110,000 in unpaid wages, plus countless hours of volunteer effort, plus
the goodwill of the local community. Even $143,000 is ridiculously cheap for a
business that employs 6 people in a self-managed work environment doing
something that is benefiting the environment and the local community. It works
out to be somewhere around $25,000 per job – for good quality jobs that people
feel proud to do. It would be cheap at ten times the price.

Compare this to all of the talk of ‘sustainable job creation’ by the big end
of town. When government agencies talk about job creation, they talk about
schemes involving millions of dollars – where the cost per job is in the realm
of hundreds of thousands of dollars.

Reverse Garbage in Brisbane has proved that, if done properly, resource
recovery can be a very cost effective way of creating employment. The challenge
is to attract sufficient start up funding so that the founders don’t all burn
out from over work/under pay and thereby jeopardise the viability of the
business. In retrospect, we needed at least $200,000 to start Reverse
Garbage. If we had access to this kind of capital, the organisation would still
be paying it off, but would probably have had a much smoother start up – with
less staff turnover.

High staff turnover has been debilitating for the organisation and made the
start up process much more stressful than it would otherwise have been. The lack
of start up capital and the corresponding low, unpredictable wages also meant
that people with kids and mortgages were selected against – in preference for
younger people with no dependents/commitments (and perhaps less useful
experience).

A recurring theme in environmentally focused organisations and co-ops is that
staff tend to be overqualified (ie. University graduates or activists with a
philosophical commitment to the ideals of the organisation). However, hiring
overqualified workers can be just as big a problem as hiring underqualified
workers. Small organisations simply cannot afford the high costs of continually
having to recruit and train new people so it is important to find people that
are well suited to the work (as well as having a commitment to the values/ideals
of the organisation) and that will stick around for the long term.

Adequate capitalisation would also have meant that a lot of time and
headaches would have been saved in terms of setting up the backwages system –
which has turned out to be quite a problem, not only for the tax office and the
auditors but also for subsequent generations of directors who are faced with a
balance sheet in which liabilities (although not current) far outweigh
assets.

Skills deficit and external directors

Reverse Garbage was an experiment in quite a radical model of worker
self-management. In order to be on the board of RG you need to work in the
organisation. And if you work there you are required to become a director and to
accept legal responsibility for the whole organisation. This is a significant
departure from the standard model of having external boards – which might
usually have one staff representative at most. It has the advantage that the
people who are actually doing the work have control over their work. However it
has the disadvantage that without outside input it can become very self
referential.

Reverse Garbage faces the reality of all small businesses – too much work and
not enough time or money. Organisations of that size generally cannot afford to
pay people to sit around pondering the future. It also faces the reality of all
progressive organisations that are struggling to survive in a capitalist economy
– with relentless pressure to compromise values and principles in the face of
perceived economic necessity.

With a pretty lean operation, it can be difficult to bring people into the
organisation that have the skills that are required to run a $300,000 a year
business and that also are keen to do hands on work, clean the toilets, and
serve customers, and who share the values of co-operation and environmental
sustainability. The common solution to this problem is to put all of the
conceptual work into one job description and to employ a manager (usually on a
higher pay scale than everyone else) that monopolises all of the interesting
work while everybody else does the slightly less challenging but no less
important work of running the actual business. However, this undermines real
workplace democracy.

Training

In order to maintain a system of balanced job complexes and to bring
necessary skills and experience into the organisation, there are a couple of
other mechanisms that can be used. One is to invest seriously in training – so
that all staff are given a real opportunity to develop the skills required to
manage and to govern the organisation. This is expensive, but it needs to be
done for a worker-managed model to survive. In order for people to participate
meaningfully and constructively in the governance of any business (or any
organisation with significant financial turnover), they need to understand
financial management, and they need a basic understanding of their legal
responsibilities.

In order to participate effectively in an egalitarian, worker managed
co-operative, people also need to have a good understanding of decision making
processes, group dynamics and must have a good understanding of the ideas,
values and principles that underpin the organisation and it’s mission. This
doesn’t happen by accident – it requires clear training and rigorous induction
processes if it is to be done well.

External directors

Another mechanism, which can complement good training is to introduce a
limited number of external directors on the board. These directors could rotate
from year to year depending on what skills are required – and can provide a much
needed external perspective. The presence of external directors does not
necessarily threaten the integrity of the worker management model so long as
their number is not sufficient to veto decisions.

Prioritise and focus

Looking back, I realise that we were insane. At one point, a little more than
12 months after starting the business, I was investigating setting up an
environmental printing business, a second hand clothes shop, a bicycle recycling
business, a printer cartridge recycling business, doing a feasibility study into
solvent recycling, setting up an eco-efficiency consulting branch of Reverse
Garbage, and doing a paper recycling research project for the Brisbane City
Council. And the rest of the members of Reverse Garbage let me get away with
it.

The lesson is simple - you need to keep your main thing your main thing.
Decide on the priorities and then focus on them. Set SMART objectives
(Strategic, Measureable, Achievable, Realistic, Time bound) and stick to them.
Prioritise and focus.

Accountability

There can often be a clash of cultures between grassroots environmental
activists and business people. In part it is due to different values, but also
different cultures. Many business people appreciate the need to radically reduce
our environmental impact, just as many activists appreciate the need for
economic activity in order to generate livelihoods for people.

This clash of cultures and values has played out repeatedly within Reverse
Garbage and at times led to debilitating interpersonal conflicts that were not
dealt with constructively. I’ll discuss only one aspect of this clash – around
the issue of accountability.

If an organisation is going to be effective and efficient, there needs to be
a high degree of accountability of the people involved. Roles need to be clearly
defined and people need to be accountable for their performance. Organisations
have rules/procedures for good reasons and for these to work effectively there
needs to be some level of accountability against these rules/procedures.

In Reverse Garbage, we wanted to walk the line between clear accountability
and having a nurturing, respectful working environment. We were trying to
operate with a non-hierarchical organisational model while also acknowledging
vastly different levels of experience, skills and probably most importantly,
confidence.

A recurring discussion that we had during the first year was around the old
saying “No socialism without discipline”. Putting it another way - you need to
have discipline before you can have freedom. The contrasting view is most
eloquently articulated by Mikhail Bakunin: “Freedom is the precondition for
acquiring the maturity for freedom, not a gift to be granted when such maturity
is achieved.”

By getting bogged down in philosophical discussions, and by focusing on
differences in cultures/workstyles, we failed to develop an effective model of
accountability that was clear and timely. This isn’t to say that we didn’t have
any accountability mechanisms at all, far from it, but problems/issues often
became politicised rather than being dealt with as operational issues, which
they often were. There were real political issues too, but these were
generally resolved easily and amicably.

A dynamic that often exists in community organisations (as well as many other
organisations) is what is sometimes called a ‘culture of applause’, whereby
everyone is always wanting to be nice to each other and to pat each other on the
back even if the thing in question is of dubious standard. Sure, it is great to
be nice to each other, but this doesn’t need to come at the expense of having
real accountability mechanisms – otherwise ‘nice’ become an acronym for “Not
Insightful or Critical Enough’.

There have been a number of major interpersonal conflicts since the start of
Reverse Garbage. These conflicts have generally not been managed in a clear,
direct and timely way – leading to significant acrimony. A more robust
culture of accountability would probably have helped us to deal with these
conflicts better and would have forced issues to be resolved rather than being
swept under the rug and allowed to grow.So is it a viable model?

Today, Reverse Garbage is a reasonably healthy organisation that employs 5-6
people full time and turns over around $300,000 per year. It diverts around 2
tonnes of re-useable materials away from Brisbane landfills each year and it
makes these available at low cost to the local community. It also exposes
thousands of people each year to the idea that ‘Waste is something we DO, not
something that IS’.

Reverse Garbage has achieved a lot but is still far from reaching it’s full
potential as a catalyst for change towards a more sustainable society.

It has shown that you don’t need government funding to set up viable re-use
businesses. It has also shown that you don’t need a manager to operate viable
co-operative businesses. There are some processes that Reverse Garbage have
developed that could well be used by other organisations to good effect. There
are other processes and practices that should probably never be replicated.

Hopefully this case study has allowed readers to understand how Reverse
Garbage was established, what worked and what didn’t. Ideally it will catalyse
discussion and debate, and provide some useful food for thought for others who
are considering establishing environmentally focused organisations that also
wish to embody workplace democracy and worker self-management.

John Hepburn was the initiator and co-founder of Reverse Garbage Co-op Ltd.
He was involved from the initial concept development in January 1998 until he
resigned as a member in March 2002. This is a personal reflection which may not
represent the views of others involved in Reverse Garbage either now or during
it’s start up phase.